Mere Reference To Proposal Containing An Arbitration Clause, Unilaterally Signed By One Party, Would Not Amount To An Arbitration Agreement: Bombay High Court

The Bombay High Court has ruled that in an agreement executed by both the parties which contains independent terms and conditions, a mere reference to a proposal containing an arbitration clause which was unilaterally signed by one party, would not amount to an arbitration agreement coming into existence between the parties. The petitioner argued that the said proposal containing an arbitration clause was only signed by the respondents and that the letter of intent was the only document signed by both the parties. Hence, the Court ruled that merely because there was proposal containing an arbitration clause, which was unilaterally signed by the respondents, and there was reference made to the said proposal in the letter of intent and the purchase order, it could not be said that an arbitration agreement came into existence between the parties. Mere reference to the proposal, without incorporation of the arbitration clause/agreement in the letter of intent dated 12/07/2012 and the purchase order dated 16/07/2012, would not amount to an arbitration agreement coming into existence.